Shares in Stanley Black & Decker (SWK -14.89%) were down by about 12% at noon ET today. The move is in response to the recently announced tariff actions by the Trump administration. 

Three ways Stanley Black & Decker will be hit

The company took a major hit in costs the last time President Trump was in office, and it looks like a similar thing will happen this time.

First, there's the hit to its costs from products from countries like China. CEO Don Allan discussed tariffs on the earnings call in January, noting that "seven, eight years ago, about 40% of what we sold in the U.S. came from China. And now we're down to a number that's closer to the mid-teens."

That's still a big number, and while management does have plans in place to switch production, given the imposition of heavy tariffs on China, the hit is still significant. For example, management said a 10% tariff rate on China would result in a "net impact of $10 million to $20 million" in 2025 for the company. As of today, the tariff rate on China is 54%.

Second, a trade war promulgated by tariff actions is negative for global growth, and that's bad news for a company making construction tools and engineered fasteners for the industrial sector.

Third, tariffs also tend to be inflationary, which usually means higher interest rates. These rates put a stranglehold on the construction markets and, in turn, demand for tools.

Image source: Getty Images.

What's next for Stanley Black & Decker?

Management can move production to other countries to avoid punitive tariffs, but as Allan noted in October, it's "unlikely that we're moving a lot back to the U.S., because it's just not cost-effective to do so." Still, it can lessen the impact of tariffs, and management has experience in doing so previously.